Shipowners ask Suez Canal to rescind May 1 toll hike

Friday, March 01, 2013

The Japanese Shipowners’ Association (JSA) has added its voice to those asking the Suez Canal Authority(SCA) to rescind plans to raise tolls on May 1.
In a letter sent to the canal authority this week, JSA said it expressed “deep disappointment at the unilateral toll increase without any dialogue between the SCA and Canal users,” noting tolls had also been increased 3 percent in March 2012.
JSA said while it shared “sympathy to some extent that the Egyptian government is dependent on the canal tolls as an important source of income for the country, in order to obtain foreign currency revenue and weather the ongoing financial difficulty, it can be recognised from a common sense perspective that the SCA should avoid easily passing on the added burden in the form of toll increases to vessels transiting this highly public infrastructure connecting the Mediterranean Sea and the Red Sea.”
JSA noted the aggregate impact of the 2012 and 2013 toll increases for its 100 members would amount to $189 million during the period from 2011 to 2020.
The association said the short three-month advance notice for the Suez Canal toll increases shows the “SCA does not take the business practices of shipping companies into account.” It asked for advance notice of at least six months.
JSA believes "regular dialogues covering broad topics between the SCA and the shipping industry would contribute to a deepening of mutual understanding and the achievement of maximum benefits to both parties." It added that it "would be happy to actively engage in an exchange of information with the SCA." The International Chamber of Shipping (ICS), the principal international trade association for shipowners, also expressed concerns over the planned toll hikes, saying "for all but the smallest ships, the Suez Canal toll increases range
from about 3 percent to 5 percent according to tonnage and ship type. These follow
across-the-board increases of 3 percent, which were implemented in March last
year despite industry protests."
ICS
Secretary General Peter Hinchliffe, said “most international ship
operators are trading in the worst shipping markets in living memory due
to there being too many ships chasing too few cargoes. This is not the
time for the SCA to be announcing increases, which for some trades seem
very dramatic indeed, and which many shipowners will find impossible to
pass on to their customers." - Chris Dupin